4 HR Mistakes That Can Lead to a Legal Nightmare

With a rapidly evolving corporate landscape, much has been made of HR’s potential role in a modern business context. Adapting to changing worker and industry compliance demands means HR be prepared to shoulder a vast array of responsibilities, including vigilance against missteps and legal risks. Legal action taken against employers by employees can have serious financial penalties, and is increasingly common: U.S.-based small and medium sized businesses face a nearly 12 percent chance that they it will be hit with an employment-related suit. Here is a guide to some of the common, yet serious, mistakes that are often made by HR departments that could lead to a massive legal nightmare:

Sloppy Hiring and Applicant Onboarding Practices

It is important that, from the moment you place an ad looking for applicants , protocol is firmly in place and transparent. Omissions or ad hoc solutions make expedite onboarding, but could lead to serious problems with compliance. This could include accidentally discriminatory language in advertising the job (“recent college grads” being a common term used that is discriminatory), insufficient training or not having a proper employment contract in place.

Incorrect Federal, State and Local Tax Payments and Filing

Employers must submit an 1-9 form for every employee within three days of their start date. An employer should not request specific forms of identification (such as a passport of social security card) but instead provide the employee with the I-9 list and allow them to choose the qualifying form of ID. If the employee is going to be an independent contractor, utilize a 1099 form, but be careful: incorrect classification of employees as contractors has led to companies like Uber finding itself in court time and time again from suits by former employees.

Vague Performance Reviews

Supervisors have a tendency to inflate employee ratings, especially if they work with the employee on a daily basis. This can lead to serious issues if the employee is terminated and files suit for discrimination. Impartial employee reviews that are conducted regularly and data driven will provide not just a solid evaluation of an employee’s effectiveness, but also protection against claims of discrimination if the employee is terminated for poor performance. Offering ongoing employee feedback can also be a useful tool to avoid litigation.

Improper Termination Protocol

In the event an employee needs to be terminated, specific protocol needs to be followed without abridgement. This includes honoring existing employment contract termination provisions and providing sufficient notice. More than anything, acting in good faith for both the business and the employee can help keep a termination from escalating to legal action. HRNext software solutions can take the pain and uncertainty out of the HR process. From managing onboarding, tax filing, data-driven performance evaluations and guiding termination protocol, we offer the most sophisticated HR resources on the market.